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Depreciation? Actual Cash Value? Replacement Cost Value? Betterment? Perils? Appraisal? Exclusions?

To most of us, insurance sounds like a foreign language. Written by lawyers, trying to navigate their language and make sense of the policy can be quite difficult. During this blog we would like to help you better understand these confusing areas of your policy.
Today we will be going over depreciation. This is often explained and often misunderstood. Depreciation is the loss in value an item has over a given amount of time. This applies to all items of value: drywall, paint, carpet, siding, and roofing materials.

So how does this apply to my roof replacement? As time goes by after you have your roof replaced, your roof may develop blisters, nail pops (nails that protrude outwards from the roof), granule loss, or other variations of wear and tear. This decreases the quality of the appearance and the value of the roof, as compared to a brand-new roof. This decrease in value is called depreciation.

Let’s look at it another way. Let’s say that you buy a brand-new rug for $1,000.00 for your hallway. Over five years, your family, dog, and friends, wear the rug so that the color is a little faded and the strands aren’t as taught. You decided to sell it, so you go to a store and they say that due to the wear it is only worth $600.00. That decrease of $400.00 is the depreciation.
It is important for each homeowner to check with their agent or insurance company to determine whether they have a recoverable depreciation policy or not as this may have big implications for large losses to your property. For any other questions, please respond below!

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